Posts by: Stephen Rötzsch Thomas

Geographic Segmentation Explained With 5 Examples

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Geographic Segmentation for eCommerce | Yieldify

Learn how to effectively use geographic segmentation in your eCommerce marketing strategy. Get inspired by real-world examples from industry-leading brands.

There is no easier route into personalized marketing than market segmentation. By breaking down your customer base into groups, you can target your resources and ensure your audience receives the messaging that is most relevant to them.

There are 4 main types of market segmentation, and each offers a different way to define an audience:

  • Demographic segmentation – grouping customers by identifiable non-character traits like age, gender, or income.
  • Psychographic segmentation – grouping customers based on their personalities and interests, including beliefs, hobbies, and life goals.
  • Geographic segmentation – grouping customers with regards to their physical location.
  • Behavioral segmentation – grouping customers based on their past actions, like spending habits, browsing habits, and brand engagements.
Geographic segmentation in eCommerce marketing

The premise is simple enough, but the key to successful market segmentation is understanding exactly how it can best work for you. Today we’re going to do a deep-dive on geographic segmentation, and discover all the different ways your marketing can benefit from it.

What is geographic segmentation?

Geographic segmentation involves segmenting your audience based on the region they live or work in. This can be done in any number of ways: grouping customers by the country they live in, or smaller geographical divisions, from region to city, and right down to postal code.

Geographic segmentation might be the simplest form of market segmentation to get your head around, but there are still plenty of ways it can be used that companies never think about.

The size of the area you target should change depending on your needs as a business. Generally speaking, the larger the business the bigger the areas you’ll be targeting. After all, with a wider potential audience, targeting each postcode individually simply won’t be cost-effective.

In total, there are six factors that pertain to geographic segmentation and can be used to create customer segments:

  1. Location (country, state, city, ZIP code)
  2. Timezone
  3. Climate and season
  4. Cultural preferences
  5. Language
  6. Population type and density (urban, suburban, exurban or rural)
Geographic segmentation factors

Geographic segmentation benefits

Easy to implement

Geographic segmentation is different from the other types of market segmentation (especially psychographic and behavioral) because it requires fewer data points.

As a result, it offers a quick and effective route into personalized marketing and can offer tangible ways to reach potential customers using only their location as a starting point.

Higher product relevancy

This helps not only to improve sales but also creates a better relationship between customer and business. Presenting relevant items to customers improves user experience, reducing the amount of effort they need to put in to find what they want.

Improved advertising effectiveness

By presenting more targeted ads, you’ll guarantee that more of your marketing budget is spent reaching relevant customers, and less wasted on those who have no need or interest in your product.

This isn’t to say that geographic segmentation is always the best strategy to employ. It has specific uses for specific businesses and industries. Small businesses working in localized areas will benefit immensely from targeting their marketing to just these areas. Big businesses with products that will have consumer hotspots in specific regions will also benefit.

An international manufacturer of big four-wheel drive vehicles will achieve more sales targeting customers in rural areas than those who drive congested city streets.

But businesses that sell products that do not depend on region-specific patterns won’t benefit as much from geographic segmentation. Consumers of Corn Flakes are likely to be as common in one region as the next.

Geographical parameters by which to segment

There are several geographical parameters you can use, these include:

Location

Getting the obvious out of the way. Segmenting by location gives you a lot of options. It could be a city, a town, different countries, or even a continent. This can also be used to identify a new geographic location your business may wish to expand into.

Climate

Do you think they are buying winter tires in Dubai? Segmenting by climate helps you identify areas where the climate is appropriate for your product or service.

Culture

When addressing your target market you need to account for cultural variations and sensitivities. For example, In Western cultures, white symbolizes purity, elegance, peace, and cleanliness. However, in China white represents death, mourning, and bad luck.

Population

This can either focus on density or population type. A brand may choose to focus on a densely populated city area, for example, a fitness chain wouldn’t set up a gym in a rural area. You can also overlay demographic information here to find target audiences.

Urban, suburban and rural

These three different environments all need different and specific marketing strategies as customer needs are different. Those in cities and suburbs tend to have more purchasing power than rural areas, so products can be more expensive.

Language

Not every country in the world wants or can be marketed to in English. If you’re running a marketing campaign it will be essential it’s done in the local language. You’ll need to make sure you’re ready to enter a market if all your marketing messages are going to need to be changed.

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Geographic Segmentation Examples

An example of geographic segmentation is an ice cream company segmenting a country by how hot different regions are and targeting those specific areas that are hottest and therefore more likely to buy ice cream.

But that’s a very basic example.

There are however a number of different variables that you might consider when setting up your own geographic segmentation. These are the different ways you might choose to target consumers once you’ve decided on the location you want to focus on. Let’s look at how each might best be used.

Example 1: Segmenting based on location

Though all geographic segmentation involves grouping customers by the area they live or work in, here we’re talking about selling purely based on the availability of a product to a certain area. This is a tool that is useful to businesses that only have the infrastructure or facilities to serve customers within certain boundaries.

The food box subscription service Oddbox has, until recently, only had the infrastructure to deliver within the borders of London. However, they have now expanded to deliver to another nearby city, Brighton.

Geographic segmentation example - Oddbox

Using geographic segmentation they were able to target potential customers living in the city and deliver relevant marketing via social media ads. See their ads targeting Londoners and Brighton residents back to back above. As a result, users who weren’t previously aware of Oddbox can be shown the service now available to them.

For bigger, global brands segmentation by country becomes even more important. One brand that always hones it’s advertisements to the country it’s targeting is McDonald’s.

To see exactly how they do this watch the video below.

Whilst the above videos can be used to address an entire country, some brands choose to go even more local and focus on specific cities.

One brand that tried this was Nike with their “Nothing Beats A Londoner” video. The video does a great job of addressing football fans in London by including key landmarks, local football stars, and general life in London.

It worked so well that it shot to the top of YouTube’s trending chart within hours. It was even covered by national newspaperstweeted by London mayor Sadiq Khan, racking up millions of views in the process.

Example 2: Segmenting based on time zone

Time zone marketing is most useful to large businesses, as they are more likely to be operating across multiple time zones. It can also be of interest to smaller businesses if they operate in nations that have more than one time zone, as the United States.

Email marketing is an area that can hugely benefit from segmenting by time zone. Whilst big announcements and press releases should generally be shared at a set time, generic email marketing often benefits from being seen at a certain time of day.

If you are looking to have your customers read your email first thing on a Monday morning, segmenting by time zone allows it to arrive at 8:45 am local time, putting your email right at the top of the pile.

Audience segmentation for eCommerce - Book a Yieldify demo now!

Example 3: Segmenting based on climate and season

There’s nothing worse than a badly targeted advert – except being caught without a winter coat in the middle of a deep freeze. Marketing based on the climate or season in a specific location allows you to present the most relevant information to your audience.

Geographic segmentation example - IKEA

Seasonal offers tend to run for long periods, like the IKEA promotion above, which was marketed to British customers just as the summer kicked in. They can also be extremely time-sensitive, like a supermarket’s promotion of ice cream during an unexpected heatwave.

If you’re targeting an area that is consistently hot, or perhaps for the duration of summer months you could get a bit more creative. The below example from Coca-Cola does just that.

The below outdoor advertisement is in Dallas, Texas. Summer temperatures here are consistently above 95°F so the ad works really well.

Geographic segmentation example - Coca-Cola

Example 4: Segmenting based on cultural preferences

Different regions will have different values that determine whether or not customers decide to make a purchase. In some cases, these values will be determined by the dominant local religion or long-standing traditions and customs, but in other cases, they can be more esoteric local habits that nonetheless need to be understood and catered for.

One of the most common considerations for food manufacturers is religious dietary restrictions. Companies like Haribo that primarily sell gelatin-based sweets, use slightly adapted recipes to cater to the needs of certain demographics.

Geographic segmentation example - Halal Haribo

The German-based company’s main factory in Bonn and their UK factory in Pontefract create their standard range of sweets. Their base in 99% Muslim-majority Turkey, however, makes and markets only halal gummies, using bovine gelatine instead of the porcine gelatine found elsewhere. 

From an advertising point of view it’s also important to consider local culture. A recent example of this is Toyota’s TV adverts for its new car the Camry.

In total eight commercials were made to target different demographics across America.

Geographic segmentation example - Toyota

Toyota even went one step further and ran the commercials in between TV Programmes whose main viewership matched the ads. People would see different commercials based on whether they were watching “Scandal” on ABC, which has a high number of African-American viewers, VS a Spanish-language network show on NBC such as Universo.

Example 5: Segmenting based on population density

Another variable to consider is the density and type of the population in the area you’re targeting. People living in urban areas have very different experiences than those in suburban, exurban, or rural regions.

Being able to segment by population density is especially useful for home and garden retailers. Imagine you’re someone like Home Depot. You probably shouldn’t pitch city-dwellers an electric riding lawn tractor, when you’d have much more luck marketing them a manual push reel lawn mower, which takes up less space and is suitable for small garden maintenance jobs.

Geographic segmentation example - Home Depot
Which lawn mower is more suitable for a city-dweller?

Don’t forget about the other types of market segmentation

Overlaying other types of market segmentation on top of these geographic parameters will allow you to drill down to a specific target market you can run targeted advertisements to. This ultimately will help you achieve customer growth and product sales.

In conclusion

Market segmentation is such a powerful tool for reaching your customers in ways that feel relevant and useful to them. Geographic segmentation is perhaps the simplest way to get your foot in the game.

Think about exactly how your company can best benefit from it: Are you a big company that can utilize different messaging across different regions, or a small business that stands to get a lot more bang for their marketing buck if they target their local area? Maybe your product will be of particular interest to city-dwellers, or most in-demand during certain seasons.

Whatever the case, there’s an opportunity to use geographic segmentation to your benefit.

Get in touch with Yieldify to discuss using audience segmentation to personalize your customer experiences!

Geographic segmentation FAQs:

What is geographic segmentation in marketing?

Geographic segmentation is a marketing strategy that presents potential customers with targeted messaging based on their geographic location.

What is an example of geographic segmentation?

A great example of geographic segmentation is a clothing retailer that presents online customers with different products based on the weather or season in the region they reside in. A customer in New York will require much different clothing in the winter months than one living in Los Angeles.

What companies use geographic segmentation?

Geographic segmentation is used by companies across many sectors, but it’s most useful to businesses selling goods that might be affected by changes in climate or local customs. Companies with very defined regional interest, like sports teams, or small businesses offering local delivery, also benefit from marketing targeted this way.

Demographic Segmentation Defined with 5 Marketing Examples

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Demographic segmentation for eCommerce | Yieldify

Learn how to effectively use demographic segmentation in your eCommerce marketing strategy. Get inspired by real-world examples from household brands.

If you want an effective way to target your marketing, customer segmentation is an excellent entry point. Segmentation groups customers based on different factors and allows you to apply messaging that speaks directly to their needs.

There are 4 main types of market segmentation: demographic, psychographic, geographic, and behavioral. Each provides different ways to look at your customer base, and define what it is that will help you sell to them.

Demographic segmentation for eCommerce

In this blog post, we’re going to do a deep-dive into demographic segmentation, and see how generic non-character traits like age, religion, or level of education can help guide your eCommerce marketing strategy. Let’s begin!

What is demographic segmentation?

Definition: Demographic segmentation groups customers and potential customers together by focusing on certain traits such as age, gender, income, occupation & family status.

It’s an accessible form of market segmentation, as it requires fewer data points to implement than psychographic or behavioral segmentation, whilst offering more selective nuance than geographic segmentation. There are plenty of ways to segment markets using demographics.

The most commonly used demographic segmentation factors are:

  • Age
  • Gender
  • Ethnicity
  • Income
  • Level of education
  • Religion
  • Occupation
  • Family structure
Demographic segmentation factors

The simplest way to adopt demographic segmentation is by using factors like age gender income, but there are many non-character traits that you can focus on. Income and family structure are particularly useful factors for retailers, allowing them to single out certain groups that might be interested in purchasing a specific product or service.

Business-to-business (B2B) marketers, however, are much more likely to rely on occupational segmentation to ensure they are pitching their products to the people who actually make purchases for their company, and not an intern who has no purchasing power.

Audience segmentation for eCommerce - Book a Yieldify demo now!

Segmentation vs. targeting – what’s the difference?

It’s important to recognize that segmentation and targeting differ, though they can be closely linked.

Market segmentation isn’t about targeting specific customers, but about creating groups based on the different traits that they share. Demographic segmentation allows you to collate your customers in a way that then lets you identify the best way to promote your goods or services to them.

Once you’ve segmented your market, you might look to target a segment – targeting itself is the action of looking at an already defined market segment and asking yourself how you can reach them specifically.

One way to better explain how segmentation and targeting are different but work together is via the STP marketing model.

STP (Segmentation, Targeting, Positioning) is a three-step approach that combines each of the above practices to hone in and successfully market to consumers.

  • First, we segment the audience using market segmentation practices.
  • Next, we choose which of those segments to target.
  • Finally, we use this information to guide our positioning and identify the most effective marketing mix to reach the audience we want to focus on.
STP model, STP marketing: Segmentation, Targeting, Positioning

What that could look like in real life is a hypothetical food company that uses demographic data to segments its market by age group. Looking at sales across these segments, they might acknowledge that 25-30 year-olds are not buying as many yogurts as older segments. So they would look to target their marketing campaigns towards the 25-30-year-old group in order to change this.

Having chosen this demographic segment as its target, the company can start working on its positioning to make it youthful and its marketing mix to reach the target market via channels they use most.

Demographic segmentation benefits

If you use demographic segmentation as part of your marketing strategy, you’ll benefit from the following:

1. Improved personalization. A segmented market allows you to present different messaging to different demographic segments. The same product can be shown in different ways – for instance, a car might be marketed as a family-friendly vehicle to parents, whilst couples who don’t have children are shown other benefits, like its suitability for long driving holidays. So your marketing strategies should resonate a lot better.

2. Improved product relevance. As a result of this, you can ensure people seeing your marketing are presented with products more relevant to them. Demographic marketing is particularly useful for advertising kosher or halal products to the right audience. An advert showing a non-halal meat product to a Muslim could risk isolating the customer and putting them off making future purchases from you.

3. Improved advertising effectiveness. To take the above example further, you’ve also wasted your marketing budget in advertising that non-halal product to a Muslim, as they are never going to be a buying customer. Demographic segmentation allows you to target the most relevant customers, and ensure that there is minimal waste in your advertising budget, higher ROAS, and lower CACs.

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Is demographic segmentation right for me?

The short answer is: it depends. Demographic segmentation is not always the most effective type of segmentation to use. It’s important to look at what you are selling, the size of your business, and who you are selling to. It might be that there are other strategies that would work better.

If you are an online clothes retailer you might want to consider if you have enough data to implement behavioral marketing, which potentially offers even more personalization opportunities.

A company that only has the infrastructure to service a local area might be better served using geographic segmentation, and one that sells hobby-centric products like c

Disadvantages of Demographic Segmentation

As highlighted above using demographic segmentation may not be the right move for everyone. As you’re only focusing on basic data that excludes actual customer behaviours and desires its effectiveness is limited.

Limited Range

For example, just because we have two people in the same demographic segment doesn’t mean they want the same things.

Using the wrong demographic variables

In some cases, it won’t make sense to use every demographic variable there is. So don’t. For example, if you’re selling high-end luxury products segmenting your market by income makes sense. If you’re selling food, segmenting by Gender may not be the most useful variable to use.

Demographics will always play an important role in identifying your target customer but it’s vital to combine demographics with other types of market segmentation to get the complete view.

Examples Of Demographic Segmentation In Marketing

Because there is such a wide variety of demographics that you can use to segment your market, there’s also a wealth of options for utilizing the strategy. Let’s look at some demographic segmentation examples in action.

Segmenting based on age

Whilst it isn’t a universal truth, it’s fair to say that people of different ages often have very different desires and Whilst it isn’t a universal truth, it’s fair to say that people of different ages often have very different desires and expectations. Taking this into account as you plan your marketing strategy can be a useful tool.

Age segmentation example

Saga Holidays sell travel packages exclusively to those over 50, and their marketing reflects this.

Demographic segmentation example - Saga Holidays

The images they use to show their holidays are serene and peaceful, the people represented in the lifestyle shots are well in the target audience’s age range, and the company goes out of its way to highlight the USPs important to their age segment: airport pick up, door-to-door travel service, insurance, etc.

This won’t necessarily appeal to all over 50 year-olds, but those who are still looking for busy, exciting adventures are not Saga’s target market anyway, so using demographic segmentation in marketing this way makes a lot of sense.

Segmenting based on gender

Gender-specific marketing can be a very powerful tool when done well, but it’s increasingly important to consider your messaging.

Pen manufacturers Bic have twice been called out for using lazy stereotypes to sell to women: first by producing a Bic for Her that was nothing more than a pink pen; and second with an International Women’s Day campaign that told women to “Look like a girl, act like a lady, think like a man, work like a boss.”

BIC for Her campaign

Effective gender marketing isn’t about playing up gender stereotypes, but about presenting clear, effective, and taEffective gender marketing isn’t about playing up gender stereotypes, but about presenting clear, effective, and targeted marketing.

An excellent example of this is our client War Paint for Men, a men’s make-up brand that provides clear and effective marketing towards their chosen market segment: from the brand name to the imagery to the content, their message is crystal clear.

War Paint for Men | Yieldify clients

Segmenting based on income & occupation

A very useful marketing tool is to segment by occupation or related demographics, such as income bracket or the level of education the person has reached.

Students are the frequent target of marketers, as a segment who are easily defined and have unique interests and needs. Perhaps the most common of these strategies is income-related segmentation.

Marketers find this tool useful as people in different income brackets can have drastically different approaches to making purchases. Crudely speaking, those in lower brackets are more likely to be swayed by good value, whereas those with more disposable income will be happier to spend more for a better product.

Demographic segmentation example - Barefoot Wine

Compare the bright and casual tone that mass-market wine brand Barefoot uses, above, with that of the luxury sparkling wine brand Nyetimber, below.

Demographic segmentation example - Nyetimber

Segmenting based on cultural background

Demographic segmentation also allows us to group our customers by ethnicity, religion, and nationality. This is perhaps most useful for those in the food sector, particularly for businesses selling food or products from specific cuisines.

Demographic segmentation example - Wanahong

WaNaHong is an online Asian supermarket selling primarily to Asian expats living in the UK. Their website features many familiar products from China, Japan, Taiwan, and other Asian nations, and is also skewed heavily towards providing the best experience for their customers, with many headings and products described in both Chinese and English.

Their COVID-19 information page was presented in Chinese first to ensure maximum clarity for their customers.

Segmenting based on family status

We can find our final group of demographic traits in the home – looking at marital statuses, family structure (for instance, how many children a family has), and the life stages of those in each family.

This could include things like how far each child is into their education, whether the person is renting their home or owns it and, in the case of the latter, whether or not they have paid their mortgage off.

Demographic segmentation example - Kohl's

Department store Kohl’s presented brilliantly conceived Back to School marketing campaign during the COVID-19 pandemic that both spoke to parents’ needs to buy equipment for the new school year, but also acknowledged the very specific and unique situation they were facing – highlighting that children might be heading back to school, but might also just be logging on for remote learning at home.

Either way, they present themselves as a solution and allow for those in this particular life stage to feel catered for.

In conclusion

Demographic segmentation is an excellent ecommerce conversion rate optimization strategy to provide relevant and targeted messaging to potential and existing customers. The key for your business is identifying which demographic segments are most relevant to you, and how best to utilize the opportunities segmentation affords you.

Demographic segmentation FAQ:

What is demographic segmentation?

Demographic segmentation groups customers and potential customers together by focusing on certain traits that might represent useful markets for a business.

What are the 5 main different segments for demographics?

The five main demographic segments are age, gender, occupation, cultural background, and family status.

What is a demographic segmentation example?

An example of segmenting by age would be Saga Holidays. They sell travel packages exclusively to those over 50, and their marketing reflects this.

4 Types of Market Segmentation With Real-World Examples

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4 Types of Market Segmentation | Yieldify

When you’re looking to improve the effectiveness of your marketing, segmentation should always be one of your first ports of call. Learn about the 4 most common types of market segmentation, plus some other ones that you may have missed.

Market segmentation is an increasingly important part of a strong marketing strategy and can make all the difference for companies in competitive market landscapes, such as e-commerce.

When up against a range of online competitors, effective communication is the best way to differentiate your business. Market segmentation offers an opportunity to pinpoint exactly what messaging will drive your customers to make a purchase.

The 4 basic types of market segmentation are:
1. Demographic
2. Psychographic
3. Geographic
4. Behavioral

We’ll go into there 4 types in a lot more detail below.

In this article, we’ll cover
1. Demographic segmentation
2. Psychographic segmentation
3. Geographic segmentation
4. Behavioral segmentation
5. Other types of segmentation
6. The benefits of segmentation
7. Conclusion

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The 4 types of market segmentation with examples

The purpose of market segmentation is to identify different groups within your target audience so that you can deliver more targeted and valuable messaging for them.

There are four main customer segmentation models that should form the focus of any marketing plan.

For example, the four types of segmentation are Demographic, Psychographic Geographic, and Behavioral. These are common examples of how businesses can segment their market by gender, age, lifestyle etc.

Let’s explore what each of them means for your business.

4 types of market segmentation: Demographic, Psychographic, Geographic, Behavioral

1. Demographic segmentation: The who

Demographic segmentation might be the first thing people think of when they hear ‘market segmentation’. This is perhaps the most straightforward way of defining customer groups, but it remains powerful. Demographic segmentation looks at identifiable non-character traits such as:

  • Age
  • Gender
  • Ethnicity
  • Income
  • Level of education
  • Religion
  • Profession/role in a company

For example. demographic segmentation might target potential customers based on their income, so your marketing budget isn’t wasted directing your messaging at people who likely can’t afford your product.

Luxury goods manufacturer Montblanc worked with Yieldify to present a selection of offers across their website. One sought to raise conversions using a Father’s Day deal that offered a free gift to those spending over £200 – an amount that acknowledged the spending expectations of Montblanc’s target audience and saw a +118% uplift in conversions for those targeted.

Another offer was aimed specifically at corporate gift buyers – a market segment that Montblanc particularly appeals to – and resulted in a +30% uplift for that segment.

Segmentation isn’t just about your business reaching customers more effectively – it’s also about those customers seeing messaging that is more relevant to them!

2. Psychographic segmentation: The why

Psychographic segmentation is focused on your customers’ personalities and interests. Here we might look at customers and define them by their:

  • Personality traits
  • Hobbies
  • Life goals
  • Values
  • Beliefs
  • Lifestyles

Compared to demographic segmentation, this can be a harder set to identify. Good research is vital and, when done well, psychographic segmentation can allow for incredibly effective marketing that consumers will feel speaks to them on a much more personal level.

In our experience working with luxury resort business Omni Hotels & Resorts, for example, were aware that a big sector of the company’s target audience was always keen to get the very best price they could. By targeting a notification campaign specifically towards comparison shoppers, Omni Hotels & Resorts achieved a 39% conversion rate uplift.

Omni Hotels market segmentation example | Yieldify

3. Geographic segmentation: The where

By comparison, geographic segmentation is often one of the easiest to identify, grouping customers with regards to their physical location. This can be defined in any number of ways:

  • Country
  • Region
  • City
  • Postal code

For example, it’s possible to group customers within a set radius of a certain location – an excellent option for marketers of live events looking to reach local audiences. Being aware of your customers’ location allows for all sorts of considerations when advertising to consumers.

Using Yieldify’s tools, an online shoe store could show different products depending on where the visiting customer was based: wellington boots for someone in the countryside, pavement-friendly trainers for a city-dweller, strappy sandals to resort visitors, and so on!

In large nations like the United States, customers could be presented with options that match with local weather patterns. Geographical identification is an important part of seasonal segmentation, which allows businesses to market season-appropriate products to customers.

Some recent examples of proper geographic segmentation came from the response by e-commerce businesses to the coronavirus pandemic. During lockdown stages, many businesses shifted their focus to local communities to highlight how their services could still be accessed online.

Conversely, as public spaces began to open up again purely e-commerce brands had to shift their marketing plans to maintain the levels of business they had seen over the lockdown period.

COS geographic segmentation example | Yieldify

4. Behavioral segmentation: The how

Behavioral segmentation is possibly the most useful of all for e-commerce businesses. As with psychographic segmentation, it requires a little data to be truly effective – but much of this can be gathered via your website itself. Here we group customers with regards to their:

Customer segmentation feature by Yieldify

All of these are datasets that can be harvested from a customer’s usage of your website. At Yieldify, we utilize behavioral segmentation to deliver highly relevant and targeted campaigns based on a number of behavioral patterns:

For example, we can distinguish between a first-time visitor and someone who’s already been on your site multiple times but haven’t purchased. Based on this behavioral data, we can tailor our messaging accordingly:

First time visitor: Hey, learn about our latest collection!
Returning visitor: Join our loyalty program and start saving!

Working with online wine club Vinomofo, we used behavioral segmentation to target three distinct audiences: new visitors, returning visitors, and returning clients.

Vinomofo behavioral segmentation example | Yieldify

One of the best examples of this type of segmentation is showing new visitors a $15 incentive in exchange for joining the community. Returning visitors who had already subscribed but have not redeemed their coupon yet were reminded on their first order incentive. Whereas returning customers saw a campaign about Vinomofo’s premium services. 

This targeted approach focused on purchasing habits reached a 34.02% conversion rate uplift with new and 29.24% CR uplift with returning visitors!

Other types of market segmentation with examples

Though the most common types of market segmentation are demographic, psychographic, geographic, and behavioral, there are other types that are also worth considering and can offer excellent opportunities in the right context.

Technographic segmentation

Technographic segmentation identifies and groups customers with regards to the role technology plays in their lives. This might mean recognizing groups of early adopters when marketing new technologies. It might also be as simple as recognizing the device users access the site from and presenting deals differently.

With personalization, it’s easy to target adverts at specific groups like this. Consumers accessing an online phone store via the Safari internet browser might be more interested in Apple products – and can be shown these as a result.

Generational and life stage segmentation

Generational and life stage segmentation both expand on aspects of the demographic approach. Identifying customers by generation allows for broad but distinct approaches depending on age.

Life stage segmentation, however, works similarly whilst divorcing life experience from age itself. Instead, it groups customers by factors including marital status, home-ownership, and whether or not they have children (and more specific still by considering the ages of their children).

Bank of America, for example, has successfully used life stage segmentation in their digital marketing strategy. Medialogic details BoFA’s “Family Life Banking” program that invited customers to segment themselves by clicking on a relatable tab within and email. From there, the customer would land on a custom microsite designed specifically for their segment.

BoFA life stage segmentation example | Yieldify

Transactional segmentation

Transactional segmentation is based on previous interactions your customer has had with your brand. Whilst it can draw on behavioral elements, it also has a much wider scope – considering the initial source of their registration with your business, how long it has been since their last order, and how many orders they’ve made overall. 

Yieldify worked with clothing retailer Turnbull & Asser to boost conversion rates on their online store. Offering free shipping to all their customers would have been too expensive, so Yieldify targeted a specific transactional segment of their userbase – offering free shipping to those with a set value of items already in their carts.

Turnbull & Asset transactional segmentation example

The shipping offer encouraged many of those targeted to make the extra purchases necessary to claim it, and drove over £22,000 of extra revenue for the brand.

Picking up on information like this is a particularly effective strategy across multiple industries, including top competitors to mass global retailers like Amazon, presenting e-commerce businesses with the best understanding of their customers, and encouraging return visits.

Firmographic Segmentation

Whilst the above marketing segmentation strategies mainly focus on B2C organizations, Firmographic segmentation can be extremely useful to those in the B2B world.

Firmographic segmentation is the process of analyzing and classifying B2B customers based on shared company or organization attributes & characteristics.

This segmentation strategy allows B2B companies to better understand and target their audience and marketing campaigns. This process is very similar to the way B2C marketers would use demographic segmentation.

This type of market segmentation predominantly uses 7 factors to identify customer segments.

  • Industry
  • Location
  • Company Size
  • Status
  • Number of employees
  • Performance
  • Executive Title
  • Sales Cycles Stage

This market segmentation process can help form an effective B2B marketing strategy by identifying target customers and tailoring marketing efforts to these specific customer segments.

10 Benefits of Market Segmentation

There are many benefits of market segmentation, our top 10 are below.

1. More effective marketing

This is the biggest and most obvious benefit to well-implemented market segmentation. By better recognizing the needs of your customers, you can identify more effective tactics for reaching them and improving their interactions and experience with your business.

2. More efficient spending

After all, your targeted marketing is going to allow for better returns on investment, and you’ll waste less money on marketing that reaches the wrong audience.

3. Higher quality leads

You’ll also notice that the more targeted more marketing is, the better your leads become. You’re reaching the right people, and they’re starting to notice you!

4. Identifying niche markets

Similarly, your research into segmentation may help you recognize areas of the market you’d not considered before and help you develop a market penetration strategy. This might even lead to the development of new products that are aimed specifically towards these markets.

5. Improved customer retention

By identifying your customers by their needs, you can put out marketing that offers irresistible reasons for a return visit. This is proven to increase customer retention, customer loyalty and lifetime value.

6. Differentiating your brand

The purpose of market segmentation is not only to help you reach your audience but also to allow your customers to see the true value of your brand via marketing that speaks to them – and in doing so puts you head and shoulders above your competitors.

7. More focus

Ultimately, thoughtful customer segmentation will allow your business to focus every element of its activity to better reach those that it serves. Your marketing becomes focused on your customers’ needs, your research and development may focus on meeting those needs, your spending will be focused on achieving these, and not wasted on mistargeted marketing and planning.

Everything becomes better suited to giving your customers what they need, and as a result, your business becomes exactly the sort of business they want to be buying from. This can greatly help with the return on investment of all your marketing activity.

In conclusion

So, as you can see there are different types of marketing segmentation you can choose from to find and define your target market to effectively promote your product or service.

Your customers’ every decision is judged on whether the result is what they want, or whether it is what they need. Market segmentation allows you to recognize these needs and market directly to them, without any wasted messaging.

Whether it’s telling new drivers about the best car insurance for them, or sharing offers on barbeques and sun-chairs to those living in the middle of a heatwave, market segmentation offers you thousands of ways to ensure your customers see you as exactly what they want, and exactly what they need.

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Market Segmentation FAQs

What is meant by market segmentation?

Market segmentation builds a subset of a market. This can be based on demographics, needs, priorities, common interests, and other psychographic or behavioral criteria.

What are the 4 types of market segmentation?

The 4 basic types of market segmentation are:
1. Demographic
2. Psychographic
3. Geographic
4. Behavioral

What are the advantages of market segmentation?

By segmenting your market you’ll be able to understand your customer’s needs better and how you can fulfill these better than your competition.

What Are Micro Conversions and How to Track Them

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Micro conversions are crucial for eCommerce sales, yet too many businesses still overlook them. Let’s explore what micro conversions are exactly and how to track them.

What do we talk about when we talk about eCommerce conversions? For many, it’s that transaction that marks the completion of a sale – in other words, the conversion of a visitor into a paying customer.

Arguably, this is the most important conversion as it is related directly to your revenue. However, it isn’t the only meaningful event happening on your site.

In fact, in order for a customer to reach the point where they can make a purchase, they are likely going to complete several micro conversions en route. In this article, we’re going to take a look at what micro conversions are, and why they matter.

In this article we will cover the following:
1. What is a micro conversion?
2. Why you should track micro conversions
3. Micro Conversion Examples in eCommerce
4. How you can track micro conversions in Google Analytics
5. Summary

What is a micro conversion?

Micro conversions vs. macro conversions

When it comes to explaining the difference, it’s easier if we start with determining what a macro conversion stands for in the eCommerce world.

A macro conversion is the actual purchase of a product or service itself. To get here, your customer has to engage with your website on multiple levels. In most cases, businesses will find it impossible to reach their macro conversion without their website visitors making at least a couple of micro conversions first.

Micro conversions vs macro conversions
Micro conversion vs macro conversion

A micro conversion is each and every active engagement with the website before the sale. There are lots of different micro conversions a customer might partake in, but they can be roughly divided into two types: process milestones and secondary actions.

Process milestones are micro conversions that take a visitor one step closer to completing a macro conversion. In other words, anything that directly leads towards the sale. This might include:

  • Browsing through multiple pages of the website.
  • Using the website’s search function.
  • Adding products to their basket.
  • Inputting voucher codes.

Secondary actions might not lead directly to a sale today, but are actions that might improve the chances of a visitor returning and making a purchase at another time. These could include:

  • Signing up to a newsletter.
  • Commenting on blog posts.
  • Watching videos.
  • Downloading ebooks.
  • Creating an account with the website.

The below chart displays how secondary actions can directly influence process milestones, thus indirectly influencing macro conversions.

What is micro conversion | Yieldify

The best example of a micro conversion is an action that feels small and insignificant to the user, but ultimately makes a big impact on their likelihood to see a macro conversion through. Browsers often have auto-fill features that can make signing up to a new account on a website as easy as two clicks – but the lasting impact of that account is the potential for many macro conversions in the future.

Why should I track micro conversions?

Given that micro conversions make up such a large percentage of the activity on a website, they can provide a lot of insight into what you’re doing right – and what you’re doing wrong. Tracking micro conversions will allow you to finetune your website and help you to increase the rate of your macro conversions.

Tracking various process milestones will enable you to better understand your eCommerce website’s UX.

For example, you might see that customers are using your website’s search function multiple times in a visit, but you aren’t seeing many items being added to baskets by these same users. This could be a sign that your search isn’t finding the relevant results. Alternatively, it might simply alert you to a related product that you hadn’t previously thought of stocking.

Low-traffic websites are especially vulnerable to the effects of poor UX, and so micro conversion tracking can be particularly useful. When visitor numbers are low, it’s important to make the most of each and every person browsing your site – and analysis of micro conversion statistics might be the difference between a bad week and a great one.

Tracking secondary actions will allow you much greater insight into how well you’re engaging your website’s visitors.

If plenty of users are opening accounts with the website, but are opting out of newsletters, you might want to think about why your marketing isn’t connecting in the way you’d like. Tracking views and engagement with blog and video posts will allow you to quickly discover exactly which topics people are most interested in – and to stop wasting resources creating content that isn’t having the intended impact.

Micro-conversion examples in eCommerce

There are so many practical applications for micro conversions in eCommerce that it’s worth thinking about which ones are going to have the most impact for you, and how tracking them might provide useful insight for your business.

Let’s look at some examples!

The first page a visitor encounters on the website for pizza delivery service Domino’s is an input for the user’s postcode. On a practical level, this is an important micro conversion that starts each customer journey towards their purchase. By sharing their postcode, potential customers enable location-specific offers that will further tempt them to buy a pizza.

This micro conversion holds useful information for Domino’s, allowing the business to track interest in their products in different areas at different times of the week. The data garnered might help them to put better offers in place when necessary – or even convince them to open up a new store in areas of high demand.

Micro conversion example | Yieldify
Micro conversion example from Domino’s

Holiday camp travel company Homair offers two opposing micro conversion opportunities on their homepage – with opportunities for users to sign up to receive email newsletters vs. physical brochures.

This allows for easy A/B testing using the results of their micro conversion tracking, giving insight into the preferences of those using the website. If engagement is particularly high with the brochures, Homair can consider investing in more physical marketing campaigns that might better reach that audience.

Alternatively, a surge in sign-ups to the email newsletter might inform them that fewer physical copies might be needed for their next physical brochure. Tracking would also allow a company to test click-rates when the CTAs are placed in different areas of the website, and see which is most successful.

Micro conversion example | Yieldify
Micro conversion example from Homair

Online gambling sites often have several different micro conversion options across their homepages. Different visitors will be attracted by different offers, and it’s important to appeal to them all.

Betfair’s website features different incentives to encourage new users to sign-up. During football season, odds will be offered for specific matches and the data relating to each micro conversion allows the company to choose which events and offers to highlight the next week.

Similarly, long-standing offers like those shown above can be rotated based on performance or even shown only at the specific periods where they have been proven to encourage the most successful macro conversions.

Micro conversion example | Yieldify
Micro conversion example from Betfair

How to track micro conversions in Google Analytics

Google Analytics is perhaps the best platform for easy micro conversion tracking. Its simple and free system encourages users to think about their conversion funnel, and how they might use micro goals to better direct their visitors towards a macro conversion.

What are micro goals? Micro goals are the individual stages that you want your users to take during their customer journey on your website. Each represents a micro conversion that is yet to happen – and your aim is to build a conversion funnel that will guide visitors towards each goal in turn.

Google Analytics allows users to set up to 20 Goals that can be tracked through their dashboard. Pre-set goals include all the most common micro conversions, like new account sign-ups, content downloads, and social media shares. Each Goal you set allows you to keep track of conversions based on the measurement of your choosing. You might want to check how many users have watched a specific video, or perhaps you’re more interested in how much time visitors are spending on certain pages.

With 20 Goals available to you, it’s possible to track micro conversions from the moment a visitor lands on your website right up until they make the macro conversion that everything is geared towards. Think about what your ideal conversion funnel is, and choose micro goals that best lead your user base in that direction.

Soon, you’ll be able to analyze exactly which micro conversions are seeing the most traffic, and which could use tweaking. You can opt to place CTAs in the areas receiving the most traffic, and think about how you might better direct people to pages that are under-served.

In conclusion

Micro conversions are hugely prolific in eCommerce, but many companies are completely overlooking their role in leading to that final macro conversion.

Take advantage of this: spend time thinking about your customer journey, and analyzing the role micro conversions have in bringing your visitors to their final purchase. You’ll open up all sorts of opportunities to help increase conversion rates, and give your customers an experience they’ll be keen to repeat.

What is a micro conversion?

A micro conversion can be defined as user completing a small step along their path towards completing a primary conversion goal (or macro conversion). For example, signing up for a newsletter (mirco) before purchasing (macro) from an eCommerce website.

What are examples of micro conversions?

Examples of micro conversions include:
1. Newsletter sign ups
2. Add to baskets
3. Using the site search function
3. Downloading eBooks or other gated content
4. Viewing a certain amount of pages